Kim Dotcom and three of his Megaupload colleagues have failed in their bid to have their extradition case thrown out, with the Supreme Court ruling they're eligible on 12 of the 13 counts against them.
But they won't be put on a plane to the US just yet, with the court also ruling they should have been allowed to apply for a judicial review of the District Court's original decision in 2015, which two higher courts denied them, and extradition needing the Minister of Justice's signoff.
Dotcom has been in and out of court for eight-and-half years now, fighting charges laid by the US in relation to his filesharing service Megaupload, whose success made the German national a millionaire.
It was shut down in 2012 when Dotcom and other Megaupload staff were arrested in a raid on his rented Coatesville mansion, on the outskirts of Auckland. US authorities alleged he'd made his millions through copyright infringement, money laundering and racketeering.
Dotcom has always argued he did nothing wrong, claiming he's the victim of a Hollywood-led conspiracy. He has used his considerable fortune - some of which he made in the years after the raid in other online business ventures such as mega.co.nz - fighting the case.
In 2015 a District Court judge ruled he could be extradited to the US, this was backed up by the High Court in 2017 and the Court of Appeal upheld those decisions in 2018. Dotcom and his colleagues made a last-ditch appeal to the Supreme Court, which outlined its decisions in a 194-page ruling on Wednesday morning.
One of the conditions for extradition under the law is that the accused's "alleged conduct, if proved, would constitute an offence both in the United States and New Zealand" punishable by at least 12 months' imprisonment in both countries.
Of the 13 counts, the Supreme Court ruled these conditions had been satisfied in 12 - but not on count three, conspiracy to commit money laundering, of which there is "no matching New Zealand offence".
The court also said Dotcom and colleagues were wrongly denied a judicial review of the original District Court decision in 2015.
"The applications for judicial review alleged that the District Court made a number of procedural and substantive errors, some of which overlapped with the grounds raised by the appellants in their case stated appeals," the Supreme Court said in a release.
The applications were dismissed by the High Court, and appeals rejected by the Court of Appeal, concluding they would be an "abuse of process" and said the appellants were "attempting to bypass the appeal provisions in the Extradition Act".
"The Court of Appeal should have engaged with the grounds raised in the judicial review applications to determine whether these grounds were truly duplicative of the grounds raised in the case stated appeals," the Supreme Court said in its ruling. "Those grounds that did not overlap with the case stated appeals needed to be addressed."
Dotcom and colleagues' legal team has now been asked to " file brief submissions identifying the issues that remain outstanding in the judicial review proceedings and setting out their view as to which court should resolve these issues".
If the judicial review isn't successful, they will be "eligible for surrender". That would need to be signed off by Justice Minister Kris Faafoi, which could also be subject to judicial review.
"It's quite possible that he could commence new litigation challenging the Minister of Justice's decision by way of judicial review," criminal barrister Steve Bonnar told Newshub ahead of the decision being made public.
A 'mixed bag'
Dotcom's legal team called the ruling a "mixed bag".
"There is no final determination that he is to go to the United States. However, the court has not accepted our important copyright argument and in our view has made significant determinations that will have an immediate and chilling impact on the internet," said lawyer Ron Mansfield.
"On the other side, the court has accepted - correctly - that we should be able to argue that the serious procedural issues that have arisen in this case can and should be argued. This means there will be further argument in the Court of Appeal and/or the Supreme Court regarding these significant concerns that are well established in the evidence.
"This is significant and means that nothing further can happen until the further required hearings take place. Kim stays here, at home, with his family."